The Impact of Human Capital on Stock Returns

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Journal of Central University of Finance & Economics ›› 2023, Vol. 0 ›› Issue (2) : 41-51.

ZHANG Yan, LIU Wei-qi, LI Jian-ying

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Abstract

In this paper, we analyze the impact of human capital on stock market based on China's A-share market.We find the higher level of human capital, the higher return on stocks, human capital is a risk factor.We analyze the internal driving mechanism of human capital premium from three transmission channels“risk transmission”,“value growth”and“information transmission”.We also find that compared with non-state-owned enterprises, human capital premium in state-owned enterprises is more significant.Financing constraints and employee information play“an incentive role”in human capital premium.Economic policy uncertainty plays“a restraining role”in human capital premium.The larger the labor market, it is easier to weaken the impact of human capital on stock returns.This paper provides a new perspective for investors' investment strategies, and new evidences for the importance of human capital.

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Human capital / Stock return / Risk transmission / Value added / Information transmission

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ZHANG Yan, LIU Wei-qi, LI Jian-ying. The Impact of Human Capital on Stock Returns[J]. Journal of Central University of Finance & Economics, 2023, 0(2): 41-51

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